A voluntary administration is a formalised type of administration that stands the company in a stationary state; and where the voluntary administrator investigates and reports on the company’s history and financial position to creditors. The voluntary administrator also makes recommendations about its future.
Creditors can then make a decision whether to:
- Accept a Deed of Company Arrangement if one is proposed by the directors,
- Liquidate the company
- Return the company to the control of the directors.
A Deed of Company Arrangements intention is to save the company and continue to operate. The DOCA is a procedure that permits a company to make an arrangement or compromise of which is binding on all creditors. If accepted by the creditors the company may be saved and continue to operate.